Quiz – Understating Inventory
Intermediate Accounting
Spiceland, Nelson, and Thomas
10th Edition
When a company understates its count of it’s ending inventory in the first year and it reports inventory in the second year, which of these is true?
When a company understates its count of it’s ending inventory in the first year and it reports inventory in the second year, which of these is true?
Find the conventional cost-to-retail percentage.
Your numbers will vary.
What is the process involved in using the dollar-value LIFO retail method for inventory?
What is the first step to take when using the dollar-value LIFO retail method for inventory?
What does the second step involve when using the dollar-value LIFO retail method for inventory?
How can one determine whether an increase in inventory value using the dollar-value LIFO retail method is due to an increase in quantities of goods rather than a change in prices?
How is the value of a LIFO layer determined under the dollar-value LIFO retail method?
What are the requirements when changing from the average cost method to FIFO?
If a company overstates its ending inventory in the current year, how does this impact the amount of reported cost of goods sold for the year?
What is the true statement regarding a company that overstates its ending inventory in Year 1 and reports inventory correctly in Year 2?